Calculate: (i) Minimum stock level (ii) Maximum stock level (iii) Re-order level (1) Minimum consumption 100 units per day (2) Maximum consumption 150 units per day (3) Normal consumption 120 units per day (4) Re-order period 10-15 days (5) Re-order quantity 1500 units (6) Normal re-order period 12 days

Answers 1

Answer:

Given :-

(1) Minimum Consumption = 100 units per day

(2) Maximum Consumption = 150 units per day

(3) Normal Consumption = 120 units per day

(4) Re-order Period = 10 to 15 days

(5) Re-order Quantity = 1500 units

(6) Normal Re-order Period = 12 days

To Find :-

(i) Minimum Stock Level

(ii) Maximum Stock Level

(iii) Re-order Level

Solution :-

(iii) Re-order Level :

As we know that :

[tex]\footnotesize \bigstar \: \: \sf\boxed{\bold{Re-order\: Level =\: Maximum\: Consumption\: per\: day \times Maximum\: Re-order\: Period}}\: \: \: \bigstar\\[/tex]

Given :

  • Maximum Consumption = 150 units per day
  • Maximum Re-order Period = 15 days

According to the question by using the formula we get,

[tex]\implies \sf Re-order\: Level =\: 150 \times 15\\[/tex]

[tex]\implies \sf\bold{\underline{Re-order\: Level =\: 2250\: units}}\\[/tex]

[tex]\therefore[/tex] The re-order level is 2250 units .

[tex]\\[/tex]

(i) Minimum Stock Level :

As we know that :

[tex]\footnotesize \bigstar \: \: \sf\boxed{\bold{Minimum\: Stock\: Level =\: Re-order\: Level - (Normal\: Consumption \times Normal\: Re-order\: Period)}}\: \: \: \bigstar\\[/tex]

Given :

  • Re-order Level = 2250 units
  • Normal Consumption = 120 units per day
  • Normal Re-order Period = 12 days

According to the question by using the formula we get,

[tex]\dashrightarrow \sf Minimum\: Stock\: Level =\: 2250 - (120 \times 12)\\[/tex]

[tex]\dashrightarrow \sf Minimum\: Stock\: Level =\: 2250 - 1440\\[/tex]

[tex]\dashrightarrow \sf\bold{\underline{Minimum\: Stock\: Level =\: 810\: units}}\\[/tex]

[tex]\therefore[/tex] The minimum stock level is 810 units .

[tex]\\[/tex]

(ii) Maximum Stock Level :

As we know that :

[tex]\footnotesize \bigstar \: \: \sf\boxed{\bold{Maximum\: Stock\: Level =\: Re-order\: Level + Re-order\: Quantity - (Minimum\: Consumption \times Minimum\: Re-order\: Period)}}\: \: \: \bigstar\\[/tex]

Given :

  • Re-order Level = 2250 units
  • Re-order Quantity = 1500 units
  • Minimum Consumption = 100 units per day
  • Minimum Re-order Period = 10 days

According to the question by using the formula we get,

[tex]\leadsto \sf Maximum\: Stock\: Level =\: 2250 + 1500 - (100 \times 10)\\[/tex]

[tex]\leadsto \sf Maximum\: Stock\: Level =\: 3750 - 1000\\[/tex]

[tex]\leadsto \sf\bold{\underline{Maximum\: Stock\: Level =\: 2750\: units}}\\[/tex]

[tex]\therefore[/tex] The maximum stock level is 2750 units .

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